General terms and conditions


Development & project work


1. Scope

1.1 These general terms and conditions apply to all development contracts and to formula developments and other cosmetic industry services which PRETTY SMART INNOVATIONS by Dr. Straetmans (“PSI”) is hired to perform. These terms and conditions expressly do not apply to the trading business of Evonik Dr. Straetmans GmbH.

1.2 Divergent, opposite or additional terms and conditions of the ordering party will not be part of the contract, unless they have been explicitly accepted in writing by PSI.

1.3 By signature of the development contract, the ordering party accepts the scope of the present terms and conditions


2. Subject of the contract

2.1 Basis of the contract is the project briefing, resp. development proposal, the general service description for the development of cosmetic products in its latest version and any additional agreements described in the finalized and signed development contract. In case the specific development process as described in the project briefing differs from the general process as described in § 3 the specific process will be considered relevant as special arrangement.

2.2 Modifications of the contract by the ordering party are only valid after explicit consent by PSI. Any modifications will be documented in written for both parties

2.3 PSI is obliged to carry out the task described in the project briefing in accordance to the principles of due professional practices and with the required accuracy. PSI does not owe a specific success to the ordering party.


3. Processing of orders

3.1 The parties develop a description of the project in a common project briefingIn the project briefing, the basis of the project, a definition of the project goals, a development plan and the required expenses to realize the project are documented.

3.2 Insofar as a cosmetic formulation is subject of the contract, PSI will produce a sample of the formulation for evaluation of the suitability of the formulation. PSI and the ordering party together will evaluate if the formulation meets the properties described in the project briefing. The ordering party is entitled to ask for up to two reworking of the formulation.

3.3 If necessary, the ordering party provides PSI in due time with information and documents required for the fulfilment of the order and takes over the responsibility for the completeness and correctness of these information and documents.

3.4 The formulation, respectively, the final result of the project will be handed over to the ordering party after completion of the project according to the project briefing.


4. Offers

If not explicitly agreed otherwise, all offers of PSI are without engagement.


5. Remuneration

5.1 The remuneration will be agreed upon in the project briefing. The remuneration may be paid as an hourly fee against expenses or as a fixed rate (flat-rate allowance). All given quotations are net values excluding local taxes and fees.

5.2 The agreed remuneration does not include any license fees for technologies owned by Evonik Dr. Straetmans GmbH and employed in the course of the realization of the project. Deviating agreements need to be declared by both parties in writing

5.3 In case hourly rates have been agreed upon, estimations of the expected work-load given in the project briefing are without engagement and shall serve as an orientation based on experience. In case of a fixed rate agreement, PSI is entitled to initiate renegotiations of such an agreement, if it is evident that the pursued development goals can not be reached based on the agreed fixed rate arrangement. PSI is entitled to request an adaption of the fixed price in case the circumstances preventing the successful achievement of the agreed project goals are out of the control of PSI,
especially, in case the ordering party is requesting amendments or supplemental claims to the development contract.


6. Payment

6.1 Payments are due according to the agreed payment plan. In case no specific payment plan has been agreed upon, the following general terms apply: In case a fixed price has been agreed upon, 25% of the overall fixed price is due upon signature of the contract, 50% after presentation of the first formulation and 25% after finalization of the formulation, however, latest after two reworking of the formulation. In case hourly rates have been agreed upon, PSI is entitled to ask for down-payments against evidence of accumulated expenses. For any other payment the payment terms and dates given in the invoice apply. Payments have to made under reference of the invoice number to the given account number of PSI.

6.2 Compensations against receivables of PSI are only an allowed when the counterclaim is indisputable or established as final and absolute.


7. Intellectual properties / copy rights

7.1 In case PSI in the course of a project develops technologies which subsequently are subject of a patent, the ordering party receives a non-exclusive, free license for these technologies limited to the application purpose described in the project briefing. In this case the parties agree in the project briefing upon a partial contribution of the ordering party to the costs of application, maintenance and vindication of the property rights. If no agreement has been fixed in the project briefing, PSI is entitled to receive an appropriate contribution to the above costs from the ordering party.

7.2 Alternatively to the rights described in § 7.1 the ordering party may request against royalty fees an exclusive license for the application described in the project briefing for technologies PSI has developed in the course of the project and which subsequently have been protected by property rights. This request has to be declared in written to PSI at least three months after disclosure of the patent. The royalty fee will be calculated by PSI according to industry standards. PSI will keep a nonexclusive, free right of use for research and development purposes.

7.3 For the application purpose described in the project briefing, the ordering party receives a nonexclusive, free license for the use of proprietary data, data bases or know-how generated by PSI in the course of the project. The grant of an exclusive right of use for proprietary data requires a specific agreement.

7.4 Inventions which have been made together by both contracting parties in the course of the project may be used or licensed by each partner without compensation to the other partner. If not otherwise agreed, both partners take over an equal share of the costs for application, maintenance or vindication of the patent. The same rule shall apply to formulations or other works which have been developed by both parties together and which may be protected by copy rights.

7.5 In case technologies which are protected by existing property rights of Evonik Dr. Straetmans GmbH are employed to fulfil the purpose of the project briefing, the ordering party receives a non-exclusive right of use against payment of a license fee which has to be agreed upon by the parties in a separate agreement. Evonik Dr. Straetmans GmbH resigns from the payment of the license fee partly or in total if the parties agree upon an exclusive supply of raw materials offered by Evonik Dr. Straetmans GmbH.


8. Third party property rights

8.1 In placing a research or development order, the customer warrants that the work thereby commissioned by the customer is not subject to third-party intellectual property rights unless expressly agreed otherwise between the customer and PSI in writing. PSI shall not be obligated to research and verify such details, and shall not be liable for any resulting infringement of intellectual property rights. If the customer does not research the intellectual property situation prior to order placement and this is not expressly stated as an included service to be performed by PSI in the offer documentation, a separate order for this service must be placed.

8.2 PSI shall notify the customer immediately upon becoming aware in the course of order fulfilment of third-party intellectual property rights which may impact usage as according to the project description. If third-party rights are infringed, PSI shall only be liable for breach of notification duty in cases of gross negligence or intent. Liability on the part of PSI in connection with third-party intellectual property rights is otherwise excluded.

8.3 If not agreed otherwise, a search for third party property rights is not subject of the development contract. The ordering party knows that combinations of actives may be well established without public knowledge that they are protected by patent rights.


9. Liability

9.1 PSI is responsible to carry out its obligations of the contract with due scientific accuracy and in compliance with accepted technical rules; however, PSI is not responsible for the accomplishment of the intended goals described in the project briefing.

9.2 Consulting of application technology will be given by PSI to its best of knowledge. All information and details regarding the composition of the developed formulation, its storage stability, its compatibility with packaging material and its microbiological stability are given by PSI to its best of knowledge. The given information do not release the ordering party from performing own studies. This also applies to the qualification of the product for the intended application, intended processes or other intended uses.

9.3 In cases of violation of obligation the liability of PSI, its legal representatives and persons or subcontractors employed to perform the contract is limited to gross negligence or deliberate intention. In cases of violation of essential contractual obligations PSI, its legal representatives and persons or subcontractors employed to perform the contract can be held responsible as well in cases of simple negligence. In any cases, whatsoever, the liability is limited to the predictable damage typical to the contract.

9.4 Basis of the contract is the development of a formulation. PSI shall be liable only for the formulation, not for any product deriving from it. If PSI in the course of the project has given any advice of storage conditions, PSI cannot be made responsible for defects of the product in case the ordering party did not observe these conditions during its storage.

9.5 Microbiological stability will be evaluated based on standard tests (European Pharmacopoeia 2011:5.1.3) and will be performed on samples produced in laboratory scale. It is in the responsibility of the ordering party to confirm the microbiological stability of the finished product with samples deriving from the production scale. PSI cannot be made liable for changes in the outcome of tests which are
related to an upscaling of the production.


10. Reservation of title

10.1 The formulation obtained in the course of the project and the rights-of-use remain property of PSI until full payment of the agreed remuneration. Property and rights-of-use of PSI may not be pledged nor transferred by way of security.

10.2 In case the property of PSI ceases due to blending or processing of the formulation obtained in the course of the project, it is agreed that the property of the product obtained from this blending or processing will be partially transferred to PSI until full payment of the agreed remuneration. The ratio of property will be calculated based on the value percentage of the formulation obtained in the course of the project in the product resulting from its blending or processing.

10.3 In case the formulation obtained in the course of the project is resold or transferred to a third party, the ordering party assigns all rights obtained from this resale or transfer to PSI until full payment of the agreed remuneration.


11. Confidentiality

The contracting partners will not disclose to third parties any technical and commercial information which in the course of the project have been exchanged and declared to be confidential over a period of five years after finalization of the project. Neither party shall be obligated to maintain confidential information, which was known to the receiving party prior to being received by the disclosing party, which is or, without the fault of the receiving party, becomes publicly known, which was received by either party from a third party without the obligation of confidence and having right to disclose the same; provided that such third party will not have obtained such confidential information directly or indirectly from the disclosing party or which has been or is developed by the receiving party independent of any disclosure of information hereunder. Third parties not affected by this provision are subcontractors of PSI which have been contracted to complete parts of the development project and which have been obligated to maintain confidentiality in an equivalent contract.


12. Publication, Advertising

The ordering party has the right to publish the results of the project after prior consulting with PSI.


13. Termination of the agreement

The right of proper notice of termination of the agreement is suspended. Both parties however have the right to terminate the agreement for cause.


14. Miscellaneous

14.1 Supplements, changes or amendments to the development contract are only valid in written form.

14.2 Place of performance for the contractual obligation is the registered office of PSI.

14.3 All contractual relationships are governed by German law.

14.4 If one or more provisions of this Agreement are or become totally or partially impracticable or invalid or violate laws or directives or if the Agreement contains a gap, the remainder of this Agreement shall not be affected. The Parties are obliged to replace an invalid or impracticable provision or fill a gap by a practicable provision which comes as close as possible to the intention of the Parties. The parties shall be able to assign any and all of its rights and obligations under this agreement to an affiliate without the prior written consent of the other party, but only in the course of restructuring or reorganization of such party, a merger of such party with an affiliate, or in connection with the sale of all or substantially all of the assets to which this agreement pertains.


Version  July 2015